The Reserve Bank of Zimbabwe (RBZ) issued a public statement on Wednesday in response to reports of a revived black market for foreign currency.
This comes after widespread refusal by businesses to accept the Zimbabwe Gold (ZiG) currency, with many shops declining to use it for transactions.
ZiG, introduced in April last year, was intended to stabilise the economy and control inflation.
However, the ZiG quickly lost value within just two weeks of its launch, sparking concerns about the government's inability to implement effective monetary policies.
Despite this, authorities instructed businesses to accept ZiG, even though the government itself continued to demand foreign currency for essential services like fuel and passport fees.
Zimbabwe's ongoing economic challenges are the result of years of policy mismanagement, corruption, and a lack of investor confidence, Zim Eye reports.
The country’s history of monetary instability dates back to the early 2000s, culminating in the notorious hyperinflation crisis of 2008, when inflation surged to an estimated 89.7 sextillion percent.
During this time, the Zimbabwean Dollar became worthless, prompting the government to abandon it in favour of a multi-currency system, primarily based on the US Dollar.
Yet in recent years, authorities have tried to reintroduce a local currency, starting with the RTGS dollar in 2019 and now with ZiG.
However, these efforts have largely failed due to weak economic fundamentals, a lack of public confidence, and the absence of credible policies to back the currency.
The government's insistence on using ZiG while still demanding foreign currency for essential services has further undermined trust in the financial system.
The rejection of ZiG by businesses has led to serious consequences, with many shops closing down due to difficulties in restocking goods.
Furthermore, retailers depend on foreign currency to import products, but with customers reluctant to use ZiG and black-market exchange rates skyrocketing, businesses are facing crippling losses.
In response to the escalating crisis, RBZ Governor John Mushayavanhu issued a statement on Wednesday explaining that only banks involved in the interbank market are permitted to set exchange rates.
He cautioned that no other businesses or entities are allowed to set their own rates: “The Reserve Bank of Zimbabwe has taken note of the confusion regarding the exchange rate determination for pricing of goods and services following the pronouncement of the Monetary Policy Statement (MPS) on 6 February 2025. It is important to highlight that the country is operating under a Floating Exchange Rate system where the exchange rate is determined in the interbank market for foreign exchange under the Willing-Buyer Willing-Seller (WBWS) arrangement.”
Mushayavanhu also reaffirmed that banks are allowed to sell foreign currency obtained from the RBZ at rates consistent with international standards.